PGW Seeks 29 Percent Rate Boost
By Mark McDonald, Philadelphia Daily News
Sep. 28–In the wake of hurricanes Katrina and Rita, the Philadelphia Gas Works is seeking a 29 percent rate increase to help it cope with skyrocketing natural gas prices that threaten both the company and its many low-income customers.
For the average residential heating customer, that jump in commodity costs translates into about a 19 percent increase in the bill or $335 more over a year.
The proposed gas cost rate (GCR) increase comes on top of a 4.9 percent boost on Sept. 1 that has been approved by the state Public Utility Commission.
The city-owned utility is asking the PUC to put the new rate into effect on Oct. 7, almost two months ahead of the normal quarterly adjustments in gas cost. PGW says it may seek yet another increase starting Dec. 1.
Under state law, the utility can seek changes in the GCR, the basic cost of the commodity, on a quarterly basis or more frequently if the market becomes highly volatile.
And that’s certainly what’s been happening in the natural gas market just as oil and gasoline prices have soared in recent weeks.
In its filing with the PUC, the company warns that without an immediate GCR increase it could face a serious cash flow crisis and difficulty in paying its gas bill early next year.
PGW also depicted the early boost as a way of helping its customers prepare for a costly winter. Instead of facing a towering increase on Dec. 1, the company wants to take the lion’s share now in hopes of collecting an additional $20 million this fall.
Doug Oliver, PGW spokesman, said the average PGW home heating customer spent $1,572 last year, up from less than $1,000 the year before. So far, the company is projecting an annual bill of about $2,066 this year.
Oliver also said the company is preparing a media campaign for mid-October that will urge customers to conserve energy by lowering thermostats and weatherizing homes.
“Customers need to be very measured in how they use heat this winter because if they use it as they did last winter, they will see very large cost increases,” he said.
Irwin A. “Sonny” Popowsky, the state consumer advocate, said his office would consider two questions regarding PGW’s gas cost rate proposal: did the company calculate it correctly and should an increase be granted ahead of the normally scheduled date of Dec. 1.
“These are the worst wholesale prices I have ever seen,” Popowsky said.
Meanwhile, in Harrisburg yesterday, State Sen. Vincent Hughes proposed shifting $80 million in state funds to the Low Income Energy Assistance Program (LIHEAP). Unlike many other northern states, Pennsylvania uses only federal dollars for the program.
“Make no mistake about it, unless we act now to help more low-income families get heating aid, we will be facing a rash of unspeakable death and tragedy this winter,” Hughes said in a press release.
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